Qbe Insurance Group Limited · ASX:QBE
Qbe Insurance — UBS Australasian Conference 2018
19 slides from Qbe Insurance's conference presentation, Nov 12, 2018
Slide 1: ASX cover letter: UBS Australasian Conference 2018 Presentation
QBE Insurance Group Limited ABN 28 008 485 014 Level 27, 8 Chifley Square, SYDNEY NSW 2000 Australia GPO Box 82, Sydney NSW 2001 telephone + 612 9375 4444 + facsimile + 612 9231 6104 www.gbe.com 12 November 2018 The Manager Market Announcements Office ASX Limited Level 4 Exchange Centre 20 Bridge St
Slide 2: QBE Insurance Group UBS Australasian Conference 2018
QBE Insurance Group UBS Australasian Conference 2018 Pat Regan Group Chief Executive Officer All figures in US$ unless otherwise stated Monday 12 November 2018 All figures in US$ unless otherwise stated
Slide 3: Agenda
Agenda 2018 performance update LMI update 2019 reinsurance program Outlook 2 QBE Insurance Group | UBS Australasian Conference 2018
Slide 4: 2018 performance update
2018 performance update Pricing remains Cell Reviews and Underwriting Improving Balance sheet Simplification favourable Brilliant Basics trends investment yield strengthened agenda rollout ongoing progressing 1H18 average rate 400+ reviews YTD Attritional claims Bottom of 2.25%- PCA benefit from Arg
Slide 5: Pricing momentum maintained
Pricing momentum maintained Positive Group-wide1 trend… North America Europe Quarter on quarter 5.9% 4.8% 4.6% 5.1% 4.3% 3.1% 3.1% 4.7% 4.9% 4.0% 3.5% (1.1)% 0.9% 0.7% (0.2)% 2.1% 0.4% 1.6% 1H17 FY17 1H18 3Q18 1H17 FY17 1H18 3Q18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 79% 78% 79% 78% 82% 83% 84% 84% Aus
Slide 6: Investment performance improved in 3Q18
Investment performance improved in 3Q18 Annualised net investment return Fixed income running yield • 3Q markets volatile - rising 2.4% 2.8% yields 2.25 - 2.75%1 0.6%2 0.3%2 2.2% • USD duration extended 2.1% 2.1% 2.2% 1.7% through 3Q FY18 target 1H18 3Q18 FY17 1H18 3Q18 • Growth asset allocation inc
Slide 7: LMI – a smaller book with better quality new business
LMI – a smaller book with better quality new business LMI new business has halved since 2013 Reduced new business volumes, lower LVR lending and aging has resulted in an effective LVR of ~50% QBE LMI new business and +90% LVR decreasing New business trends 40% 35% GWP - 57% reduction 30% LVR >90% 25
Slide 8: 2019 reinsurance placement - progressing to plan
2019 reinsurance placement - progressing to plan Not renewing in-the-money risk and catastrophe aggregate treaty Returning to a more traditional catastrophe reinsurance structure More appropriate risk cover Optimising balance sheet protection, capital credit, cost and earnings variability Earnings v
Slide 9: Outlook
Outlook
Slide 10: Our 2018 priorities
Our 2018 priorities 2018 targets 1 Simplify QBE COMBINED 2 Brilliant Basics OPERATING 95.0% – 97.0%1,2 RATIO 3 Drive performance improvement INVESTMENT 4 Further reposition North America 2.25% – 2.75%2 RETURN 5 Remediate Asia Reinsurance placement & cost-out 6 Further develop talent and culture Tues
Slide 11: Questions & Answers
Questions & Answers
Slide 12: Disclaimer
Disclaimer The information in this presentation provides an overview of the unaudited results YTD 2018 as at 30 September 2018. This presentation should be read in conjunction with all information which QBE has lodged with the Australian Securities Exchange (“ASX”). Copies of those lodgments are ava
Slide 13: UBS Australasian conference presentation script
UBS Australasian conference 12th November 2018 Presentation script Slide 2: Agenda Good morning everybody and thank you for joining me today. I have a few items to talk about this morning, including a brief update on the insurance pricing environment, how our 2018 full year performance is tracking,
Slide 14: Slide 3: 2018 performance update (script)
Slide 3: 2018 performance update Turning to our 2018 performance. We have continued to make good progress since the first half results, with Q3 being in line with expectations in all divisions. Pricing The global pricing environment has remained supportive in Q3, which combined with our approach to
Slide 15: Script: Brilliant Basics and underwriting trends
As I’ve said before this isn’t just about achieving common minimum standards everywhere, although that is important. But moving to genuine levels of market leading excellence – the Brilliant in BB. Whether that’s using machine learning, open source data, insuretech partnerships to accelerate things
Slide 16: Script: balance sheet and simplification agenda
I will talk in more detail about our investment returns in a moment. Balance sheet strengthened I am pleased with the current strength and positioning of the balance sheet. Our PCA multiple is stable towards the upper end of our target range and our reserving PoA is also expected to be stable at 90%
Slide 17: Script: premium rates and investment performance
• And in North America we have achieved 10.1% in reinsurance A&H, and 8.6% in our accident and health portfolio • Importantly for the recovery in Asia Pacific, rate trends have continued to improve further with now a slight positive overall. Just as pleasing as the level of premium rate increases be
Slide 18: Script: LMI and reinsurance placement
And the book is now of a different and higher quality. New business volumes are now less than half the level they were in 2013. And new business quality is much stronger: • Greater than 90% LVR lending down from 35% to 20% of new business today; • Interest only lending has fallen to 10% of new busin
Slide 19: Script: reinsurance expense and 2018 outlook
Overall, we expect to be better protected against catastrophes but will retain more on the frequency of our large individual risk claims. With the work being undertaken across the Group to improve underwriting discipline and reduce our risk profile, I think it is appropriate that we ‘eat a little mo
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